BENGALURU/NEW DELHI: Online marketplace Snapdeal took four months to initiate a formal complaint against executives of logistics company GoJavas — in which it owned a minority stake — after a forensic report by auditors indicated instances of poor corporate governance, according to people aware of the incident.

The Gurugram-based online retailer – which is currently undergoing due diligence as part of an anticipated sale to rival ecommerce firm Flipkart – registered a complaint with the Economic Offences Wing of Delhi Police in December last year. After investigating the complaint, the police registered an FIR on June 23.

The forensic report by audit firm KPMG was instituted by Jasper Infotech, the holding company of Snapdeal.

According to the sources ET spoke to, the company rejected its then-Group General Counsel Ashish Chandra’s recommendation to file charges against the former senior executives of Quickdel Logistics, the parent company of GoJavas.

Instead, it decided to cut its losses, and offload its stake in the logistics firm in which it had invested over Rs. 350 crore over a period of almost two years, the people cited above said.

In its response to an ET questionnaire, Snapdeal spokespersons denied that Chandra’s recommendation had been rejected. “The matter was presented to the Board by Mr Anup Vikal, as in all other instances, and legal action initiated as per recommendations put forth to the Board and approved by it,” a Snapdeal spokesperson said in an email statement. Anup Vikal is the chief financial officer of Snapdeal.

“Since there is no disagreement on this subject, this clearly is not the reason why Mr Chandra left Snapdeal,” the spokesperson further stated. Chandra left Snapdeal in March 2017. He declined to comment for this story.

People privy to the developments are of the view that Snapdeal took four months to file a formal complaint primarily to avoid undertaking a cumbersome legal route to recover its dues from GoJavas, which was estimated at Rs. 40 crore of receivables at the time of filing the complaint.

Subsequently, Snapdeal sold its 49.99% stake in GoJavas, which at its peak was valued at Rs. 600 crore, to Delhi-based logistics firm Pigeon Express in March 2017, in what sources reckon was a slump sale.

KPMG did not reply to email queries, while Anand Rai, chief executive of Pigeon Express, remained unavailable for comment.

A senior executive at Pigeon Express, which had acquired a controlling stake in GoJavas in August last year, also added to the list of complaints filed by Snapdeal.

“We added our list of additional complaints to the one filed by Snapdeal in December 2016. We wanted to inform the government of the discrepancies we noticed during the due diligence of the company and after takeover. We are not sure why this was not done earlier by Snapdeal,” the person told ET. The FIR, which has been reviewed by ET, names former executive director of Quickdel Logistics, which owned GoJavas - Abhijeet Singh, along with promoters Praveen Sinha, Randhir Singh and Ashish Chaudhary as the main accused, registering a criminal complaint against them for cheating, forgery, conspiracy, criminal breach of trust and criminal misappropriation of funds.

All four executives do not work at GoJavas anymore. Sinha did not respond to detailed queries sent by ET, other than saying that he was ‘unaware’ of an FIR naming him.

For Snapdeal, the implosion of GoJavas is the latest example of a venture that it had invested in, or acquired, having to shut down, or drastically reduce its operations.

In February, the company shut down Shopo, an online marketplace, which it had acquired in 2013. In April last year, PepperTap, a hyper-local delivery startup, in which Snapdeal had invested, also shut its operations, while announcing its decision to pivot into a logistics services venture.

Additionally, the founder of financial products platform RupeePower took back control of the company in August last year, barely 16 months after being acquired by Snapdeal.

The all-equity merger deal includes an exchange ratio of 4.39 HUL shares for each GSK Consumer India share, along with GSK entire operations of nutrition business and contract to distribute the latter's over-the-counter (OTC) and oral care brands such as Sensodyne, Eno and Crocin.